The present invention relates in general to financial planning, and more particularly, without limitation, to a computerized system and method for creating, organizing, managing, and/or tracking pool-based views of financial positions.
As a person earns an income and progresses through life, she will from time to time be presented with life necessities or desires (i.e. goals) that will require her to spend more money than her periodic income may support. Examples of such expenditures might include a new car, college, an engagement ring, a home, a child's college education, and retirement.
Periodically depositing money into an interest-bearing savings account is one way to set aside funds, but most people typically invest at least some portion of their savings. Such investments might include higher risk investments that offer higher returns or low-risk investments that offer lower returns.
How an investor chooses to allocate money among a number of lifetime expenditures may depend on many factors, such as the investor's personality (e.g. organized, spontaneous, etc.), the investor's periodic income and accumulated savings, the nature and relative costs of the goals (e.g. extravagant versus adequate), and knowledge of financial planning concepts. Based on these factors, some investors may take an ad hoc approach, such as funding an expenditure as it arises by using the most liquid investment in the investor's portfolio, while others might take a slightly more measured approach that is planned years in advance. For example, an investor may decide that savings in a 401k plan are to be used only for retirement, and nothing else. Others may retain a financial planner from a financial institution for professional help in planning expenditures and investments to meet those planned expenditures.
For the most part, the financial services industry has created a standard process by which a financial plan is created for individual investors. The process typically consists of investors gathering all their financial data, describing all their financial goals, and indicating their appetite for risk. From this data, a complete financial plan can be generated and an investment portfolio can be created to target the investor's goals and risk profile.
While such a plan may be the ideal situation (assuming the investments meet expectations), in reality there exists a large base of prospective customers that will never go through the financial planning process as defined by financial institutions. Many investors are not willing to take the time or energy involved with gathering all financial data, planning all goals, and determining risk comfort levels. Moreover, many investors are unwilling to relinquish control of their investment portfolio to a third party, and even if they use the financial planning process they still have a difficult time understanding performance of their money relative to the plan and the process. Therefore, there is a gap between the ideal process and the process that the majority of investors actually use to manage and track investments.
The following are observations about the financial planning process for many typical investors:                Many investors are only concerned with a single financial goal, or have limited time and want to focus on a small number of goals and will not allocate time for a lengthy financial planning process.        The financial planning process is intimidating for many investors.        Many individuals will continue to choose and implement their own investment/debt strategies.        For every financial position there is a reason why the investor/entity placed their money in that position. Many individual investment/debt strategies are implemented without rigorous analysis and may not be suited to a particular investor/entity. Most of these are not well defined and/or not monitored for performance over time.        Most investors that use a financial advisor for all or part of their money do not have an easy interface to obtain a real-time update on their advisor's performance and/or progress toward achievement of their financial plan.        Many investors will not use financial advisors because they do not trust them, and are not sure how to measure their effectiveness.These observations, if true, indicate that traditional financial planning may never be utilized by some types of investors and can be further enhanced for those investors that utilize the traditional process. For these investors, alternative solutions to financial planning may be attractive. It is also important to note that these observations not only affect an investor, but they also apply to financial institutions who desire to provide financial services to an investor. Additionally, these observations apply to other related companies, such as financial software providers, that desire to provide financial tools to investors.        
Accordingly, an alternative financial planning strategy should take into account the following assumptions:                Some planning is better than none. If an exhaustive financial plan is not undertaken, there is still a benefit to identifying one goal and tracking progress toward that one goal. More goals can be added later, allowing a plan to be built incrementally over time.        Investors will continue to develop and implement their own money management strategies with a wide range of sophistication. Performance tracking can help to show näive investors any errors in their money management process and/or capabilities. Providing an effortless way to assign and track the reason(s) for investing will provide helpful feedback that the entity can use to modify their money management practices to benefit their financial status.        All levels of investors from the most basic to a very sophisticated investor can benefit from a more personalized system for organizing and tracking their money        
Goal oriented investors may want to be able to create simple life goals and track the utility of their financial assets relative to achievement of stated goals, goals which in many cases are not well understood in terms of financial assets. As a first example, consider an investor that wants to be able to pay for college for her two children. As a strategy oriented investor, she may have target incomes, returns and performance standards she is trying to achieve, and may be employing multiple types of trading strategies to achieve target returns. These types of investors are trying to find and employ strategies that are successful relative to the market, and/or absolutely successful relative to a target return level. As a second example, consider an investor who subscribes to a newsletter or magazine in which an investment advisor recommends five stocks as her top picks for the year. The investor may want to track those picks and determine if that advisor provides an adequate rate of return over time. At a higher level, the investor may want to track an aggregate of all third party picks against their own picks, or against the traditional market benchmarks over time. This will help the investor understand if they are better off using outside recommendations or their own ideas. Ultimately for the majority of intended users, it may be ideal to integrate and track life goals with dynamically changing investment and savings strategies over time. So in an ideal case, an investor may create multiple life goals and employ multiple strategies to try and achieve those goals.
Once life goals are established, investment performance necessary to achieve goals can be derived in order to define the utility of the financial assets relative to the goals. It is therefore advantageous in tracking goals to understand how well investments are performing so that corrective action can be taken to improve the likelihood that goals are achieved. Additionally and/or alternatively, for investors focused on investment strategies, it is important to track the success of strategies over time so an investor is able to discard strategies that are not successful.
It would be desirable to have a system that allows users to track performance of one or more personalized life goals in isolation, or as aggregated with a larger hierarchy and/or cloud of goals and strategies. An instance of this grouping and tracking can be called a Money Pool. Ideally, the system would be able to address the compounded problem that may occur when financial positions are distributed in whole or part across multiple accounts at one or more financial institutions.
Some financial institutions and related companies provide web based applications that allow individuals to track financial positions by account and in some cases aggregated across accounts at that institution and outside institutions. These interfaces allow for tracking of gains and losses on financial positions. There may also be financial planning tools to help individuals analyze their financial position and potential to achieve goals like retirement income and college expenses.
However, what the financial institution and existing applications fail to provide to an investor is the ability to create, categorize, store, and monitor separate personalized hierarchies and/or clouds of money pools consisting not by accounts but by goals/purposes, strategies/tactics, entities/beneficiaries, and tax-status, for example, against which financial positions can be applied in whole or part. Furthermore, there are no multiple hierarchies and/or clouds of money pools consisting of goals/purposes, strategies/tactics, entities/beneficiaries, and tax-status, that can be applied across financial positions in multiple accounts at one institution, or across multiple accounts at multiple institutions.
A separate personalized hierarchy and/or cloud of money pools would allow financial institutions and advisors to better understand their customers' needs, both as individuals and in aggregate. Therefore, also lacking in the art is a higher-level monitoring tool to allow financial institutions, employers, and other entities to track money pools created by an institution and provided to large numbers of investors, in order to provide improved services to would-be investors. Such improved services could include, for example, a new investment offering consisting of a portfolio of investments that other users have successfully associated with pools for college education targeted at a specific time horizon. Furthermore, a financial institution could track third party investment strategies they introduce to investors and even investor created strategies and integrate those into their money pool system so that other entities could use them as money pool templates. It would be desirable if such templates were pre-defined, perhaps by a financial institution or other third party. In addition, it would be desirable if these templates could be activated in a variety ways
It would also be desirable if a personalized pool based system for organizing and tracking financial positions could provide access to a large network of pools and pool templates created and/or managed by an unlimited number of financial institutions, third party financial experts, social networking communities and other investors. Such a network would provide an investor with the ability to search and filter the available universe of pool templates based on personalized criteria that would include but not be limited to, time horizon, purpose, style, risk scores, etc. Pool templates selected from the network by the investor could be implemented within investor owned accounts at the investor's financial institution's system of record by the investor or by outside parties. The pool network could be maintained by a financial institution or independent third party.
Thus, it would be desirable to have a computerized system and method for creating, adopting, subscribing to, managing, measuring and tracking money pools and money pool templates, to improve the financial planning and money management processes for individuals and entities.